Option 1: Reduce Services – Maintain Rates

Average residential and business rate increase each year over 7 years: 3% rate cap only.

3% is the expected rate cap to be set annually by IPART. If the actual percentage set by IPART is lower in the 7 years, then further reductions in spending will be required.

This option will see a dramatic difference in community infrastructure and services over the next 7 years. With income restricted by the rate peg, Council will need to make some big changes to meet rising costs and achieve a balanced budget.

Average residential and business rate increase each year over 7 years: 3% rate cap only. 3% is the expected rate cap to be set annually by IPART. If the actual percentage set by IPART is lower in the 7 years, then further reductions in spending will be required.

This option will see a dramatic difference in community infrastructure and services over the next 7 years. With income restricted by the rate peg, Council will need to make some big changes to meet rising costs and achieve a balanced budget.

Reduction in maintenance of our City's assets and infrastructure

$20.8M will be saved over 7 years through a major reduction in city infrastructure maintenance. Without regular maintenance, the quality of our infrastructure and environment will decline over time, and more expensive reactive and emergency work may be needed.

Consequences could include:

• Longer response times for requests for graffiti removal, tree lopping, and vandalism repairs.
• Less frequent mowing, weed removal and spraying, gutter cleaning, and litter collection. This would result in a reduction in standards for users. For example, the grass in our parks and playing fields could be longer. Our wetlands could also become choked with weeds and litter.
• Safety and environmental hazards may increase, for example trip hazards, unsafe trees, bushfire hazards, and soil erosion.

Roads and drainage works reduced

With $24.1M less budgeted for roadworks, such as kerb, guttering, and resealing, the quality of our roads will decline to a 'fair' condition within 10 years.

The budget for replacement of failed drainage systems and flood mitigation measures will reduce by $3.9M over 7 years. This will make it harder for our drainage system to cope with major flooding events.

Reduction in environmental programs and works

The Sustainability Levy will not be extended beyond 2014. As a result there could be a decline in the quality of our lake, coastline, and bushland. Vegetation maintenance programs for our foreshore reserves and for bushfire engagement will be affected. Environmental works and programs, such as lake water quality programs, will reduce significantly, as will programs to minimise pollution, waste generation, and resource consumption.

Closure of major community facilities

To save money, Council will need to close a number of major facilities. In 2012/13 the Lake Macquarie Performing Arts Centre and 2 pools will close. One pool will be put out to contract for management. Libraries will be open for reduced hours initially, then 5 libraries will close between 2013/14 and 2014/15. This will save $24M over 7 years.

Reduced construction and maintenance of footpaths, cycleways, and traffic facilities

Our construction program for new footpaths, cycleways, and traffic facilities will reduce by $4M over the 7 years. In addition, no new boat ramps or jetties will be constructed, saving $2.3M over 7 years.

Reductions in service levels across the City and loss of 123 Council staff

Staffing reductions across all areas of Council will occur, saving $42.6M over 7 years. With reduced staffing, response times for service requests and turnaround times for processing development applications will be longer.

The Economic Development Department would be disbanded, including closure of the Visitor Information Centre at Swansea. One staff position would be created to assist employment generating development proponents with site identification and approval processes, with a second position created to assist in facilitating events that attract visitors to the City. This would effectively reduce staffing for Economic Development from 7.4 to 2 full time equivalent staff.

Under Option 1 only about 77% (8,500 of the 11,000) service requests we receive each year will be completed. Requests that will be delayed or not carried out include footpath repairs, road patching, and graffiti removal.

Limited new capital projects

New capital expenditure over the 7 years will be limited to $240M. While Glendale Transport Interchange and the Lake Macquarie Waste Strategy will be funded, town centre upgrades for Cardiff, Charlestown, Belmont, Toronto, Morisset, Warners Bay, Glendale, Swansea and Mount Hutton will not go ahead under Option 1.

Financial Outcomes

Council will continue to experience an operating deficit over the 7-year period. The current $15.8M operating deficit would reduce to $8.5M by 2018/19. Council's maintenance and infrastructure backlog will increase significantly.